Market Status Changed to a Downtrend; HCL Tech Signs Deal with UD Trucks

Nifty, -1.8%; Sensex, -1.8%; Nifty Midcap, -2.1%; Nifty Smallcap, -2.4%; Model Portfolio, -2.2%

Market Pulse: Downtrend

Nifty gapped lower by more than 300 points this morning. It breached its April 12 low (12,248) and made a new low of 14,192. Buying was seen at the day’s low, which helped Nifty close above 14,350. On the sectoral front, Nifty Bank, Auto, and Fin Services closed 2–3% lower. On the flip side, Nifty Pharma closed in the green. The advance-decline ratio was in favor of decliners. Of the 2,297 stocks traded, 398 advanced, 1,535 declined, and the rest remained unchanged.

We had changed the market status to a Rally Attempt from a Downtrend on Friday after Nifty managed to hold above the previous correction low (14,248) for three consecutive days. But today, as Nifty breached that low, we are back in a Downtrend.

Looking forward, we will shift the market to a Rally Attempt if Nifty establishes a bottom and stays above today’s low (14,192) for three straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of early-stage base patterns and showing the best relative strength with good accumulation.